Further written evidence submitted by
Garry Mallen
Further to the oral evidence I gave to the Committee
on Thursday 30 June, I wanted to clarify a point relating to the
establishment of a National Trading Database. During the oral
evidence last week, there appeared to be some confusion between
this and a benchmarking survey on operating costs. The two documents
are very different and should be seen as separate stand alone
initiatives rather than interchangeable.
A national trading database was first referred to
by David Rusholme in giving oral evidence to the Committee in
December 2009. At that time, as I understand it, it was envisaged
as a comprehensive database of actual data on levels of trading,
turnover etc rather than a benchmark to provide an indicative
average for operating costs alone. Subsequent to discussions between
the RICS and ALMR, it was agreed that this initiative would
not include benchmarked operating costs and that the ALMR Survey
would instead be recognized and endorsed by the RICS. This is
reflected in the RICS Guidance on Valuations and in David Rusholme's
evidence to the Committee.
Whilst a national trading database has yet to be
delivered, I remain unconvinced that it would provide meaningful
information for lessees. The pub companies simply do not have
the information on turnover and sales mix data needed to allow
for a meaningful comparison of rents. In contrast, the ALMR
Benchmarking Survey provides robust, relevant data on one key
component of the rental valuation. It is already the national
database on operating costs referred to by the Select Committee
in questioning last week. I have attached a full copy of the latest
survey by way of information.
The key question from a lessee's perspective is not
whether a national database exists - it does on the key points
that matter most, namely operating costs—but rather why
it is not being used and applied. I remain concerned that rental
valuations are being prepared without reference to either the
RICS Guidance—which references national benchmarks—or
the ALMR Benchmarking Survey and that rents and projected earnings
are being significantly distorted as a result.
Landlord representatives have repeatedly refused
to work in partnership with ALMR and IPC on this issue and there
is neither cooperation nor meaningful dialogue on this matter—despite
the BBPA's commitment to the Committee in 2009 to provide the
right information to the RICS or the ALMR to produce a database
that is fit for purpose.
7 July 2011
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